Some have praised the scheme as an innovative way of fundraising for hospices.
Photograph: Alamy

Hospices for the dying have been warned against a controversial scheme encouraging them to branch into the funeral business with an undertaker turned tycoon who wrote the book How to Become Dead Rich.

Hospice Funerals is a joint venture between St Margaret’s hospice in Taunton and Memoria. The firm’s chief executive is Howard Hodgson, whose book charted how he became wealthy by taking over scores of undertakers “against the background of Margaret Thatcher’s enterprise culture”.

Under the plan, hospices that sign up, for a £10,000 fee, will be able to offer low-cost funerals to the families of patients who were in their care. It has been praised by some as an innovative way for hospices to raise funds; but others are concerned that bereaved families will feel pressured to choose the funeral scheme as a way of paying back the hospices for their care.

The initiative, to be advertised on TV next year, threatens to sour relations between hospices and local funeral directors and raises ethical questions about how funds are raised to care for the dying.

Fran Hall, the editor of the Good Funeral Guide, is writing to all 191 chairs of hospices across the UK this week, warning them of potential “catastrophic” damage to their reputations if they sign up.

The letter accuses Memoria of using the good name of the hospice movement to gain unfair advantage over local funeral directors. Competing with “established, trusted and well-liked funeral providers” is potentially disastrous, it says, “impacting on the public perception that a hospice is a wholly altruistic organisation”.

Some hospices are concerned that the scheme could harm the sector. Peter Hartland, the chief executive of St Luke’s hospice in Sheffield, said: “I worry that families using our free services might feel under moral pressure to use a funeral service branded under the hospice banner, believing that because their loved one had received care from our charity, they should repay us. Worse, some might feel that we offered those funeral services to profit from such families.”

He added: “The word hospice is precious. It should not be for sale.”

But Ann Lee, the chief executive of St Margaret’s and co-founder of the initiative, insisted it was motivated in part by a desire to tackle funeral poverty by offering low-cost funerals to the families of its patients.

She said it had been approved by the Charity Commission and the Care Quality Commission.

“Hospices have to find funding to sustain the work they are doing,” she said. “We did a lot of independent market research and 82% of people we interviewed thought it was the right thing to do.

“This is our attempt to ensure that we wrap our services around the patients after they have died through to the bereavement.”

Lee defended the partnership with Hodgson. “We have done a lot of due diligence,” she said, pointing out that his book was published 27 years ago. “Many entrepreneurs write books. What Howard and his team are doing is a very generous offer to the hospice movement.”

Hodgson said: “Dead Rich is a book celebrating the fact that I built a business from one branch to 546 and became entrepreneur of the year along the way.”

Despite qualms, some hospices are interested. When the initiative was launched at a Hospice UK conference one hospice director said linking hospices and funerals was a “match made in heaven”, and another said it was “genius”.

But funeral directors and celebrants claim it is an unethical encroachment on their business and could reduce charitable donations from bereaved families to local hospices.

Simon Helliar-Moore, a funeral director at the Taunton-based Crescent Funeral Services, said: “Many bereaved families ask that donations be made to the hospice but this may make them rethink. We hope the public will think carefully about this and not feel pressured into using the hospice funeral service through a feeling of guilt rather than because they feel it does provide the best service for their loved one.”

He said any hospice that got involved would become “a corporate funeral director franchise – very far from the local charity that is said to be providing a service to its community … Because Memoria own crematoria around the country, they will be lining their own pockets with funerals that are carried out.”

Hodgson defended the plan: “Just because it has commerciality doesn’t mean it’s wrong.”

He admitted that if the idea took off there would be potential spin-off benefits for his chain of crematoria. “I’m sure there will be some funeral directors who would be very annoyed about it, but that doesn’t mean it is the wrong thing to do. Our motivation is to make something successful by giving the best possible standards of service at the most reasonable price. That is what people are upset about. There is a care gap and I’m trying to fill it.”